This article, “How a Port Town in Africa Highlights the Potential of Frontier Markets,” highlights the potential of frontier markets using the example of the port town of .
The author, Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, highlights the transformation of Berbera Port in Somaliland since 2016. Investments have significantly increased the port’s capacity and efficiency, reducing unloading times from four days to ten hours and increasing annual capacity fivefold. A new shipping route connects Somaliland to Asia and the Middle East.
Beyond the port, a road corridor to Ethiopia and a special economic zone are making Berbera a vital trade gateway for Ethiopia. This infrastructure aims to unlock trade opportunities for both industry and Ethiopia’s 135 million people.
He also mentions discussions with African leaders at UNGA80 about trade, job creation, and resilience, emphasizing the importance of business and government collaboration for inclusive and long-term growth, topics that will also be central to the upcoming B20 Summit. Berbera serves as an example of progress through vision, partnership, and investment, showcasing growth unfolding across Africa. He shares lessons from Berbera in his latest blog about investing with purpose in frontier markets.
Here’s a concise explanation:
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Frontier Market Opportunity: The author argues that frontier markets like Somaliland offer significant investment opportunities, despite perceived risks.
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DP World’s Strategy: DP World makes long-term infrastructure investments in these markets to transform economies and trade patterns.
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Berbera as a Case Study: Berbera’s port is being developed to serve not just Somaliland, but also landlocked Ethiopia, a large and rapidly growing economy.
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Strategic Location: Berbera’s location on the Horn of Africa makes it a vital trade junction, connecting to the Red Sea, Middle East, Asia, and other African ports.
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Investment and Development: DP World is investing in the port, a special economic zone, and local communities in Berbera. Other entities like the Abu Dhabi Fund, UK Aid, BII, and UNDP are also contributing to the region’s development.
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Economic Benefits: The port’s expansion has significantly increased capacity, reduced unloading times, created jobs, and boosted local government revenue.
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Key Principles for Frontier Markets:
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See opportunities where others see problems.
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Build ecosystems, not just ports, by investing in broader infrastructure.
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Take a long-term view and invest in potential rather than just immediate demand.
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Africa’s Potential: Berbera exemplifies the broader potential of Africa to increase exports and imports, contributing to economic growth and prosperity.
The complete piece is as follows:
How a Port Town in Africa Highlights the Potential of Frontier Markets
By Sultan Ahmed bin Sulayem
Group Chairman & CEO of DP World, Chairman of the Ports, Customs & Free Zone Corporation
Abstract
From the outside, Berbera may seem like a remote port town in the Horn of Africa. But from the inside, it tells a bigger story. One of possibilities and progress.
In 2016, we committed to transforming Berbera Port. Today, its quay is longer, its ships are larger, and its role is regional. What once took four days to unload now takes just 10 hours. Annual capacity has increased fivefold. A new direct shipping route to Jebel Ali is connecting Somaliland to Asia and the Middle East with greater speed and certainty.
Berbera’s story goes beyond the port. Together with the road corridor to Ethiopia and a new special economic zone, it is becoming a vital second gateway for one of Africa’s largest and fastest-growing economies. This is infrastructure that unlocks opportunity for trade, for both industry and the 135 million people in Ethiopia.
At UNGA80, I met with African leaders who spoke with clarity and urgency about accelerating trade, creating jobs and building resilience. As we look ahead to the B20Summit, these same priorities will remain central to how business and government can work together to deliver growth that is both inclusive and long-term.
Berbera shows what progress looks like when vision, partnership and investment come together with purpose. It is a reminder that growth is not a distant goal, but something that’s unfolding across Africa right now.
In this blog, I share lessons from Berbera and what it teaches us about investing with purpose in frontier markets.
Introduction
When most investors look at frontier markets, they do so from a distance – placing small bets through funds managed by others.
At DP World, as a leading global logistics provider, our strategy tells a very different story: making long-term infrastructure investments over decades, and in ways that transform economies and shift patterns of trade.
In this way, we have connected small businesses in remote areas to global markets, transformed ports with modern infrastructure, and used overland routes to extend the benefits of trade.
It is some of my most interesting work, requiring effective partnerships, consistent teamwork, and deep expertise amid complexity – as well as vision and boldness.
I want to bring it to life by taking you to a fascinating place with a remarkable future: Berbera.
A port town with international potential
Located on the Horn of Africa’s coastline, the Port of Berbera in Somaliland overlooks the Gulf of Aden, positioned as a vital junction for trade.
To the northwest are the Red Sea and the Suez Canal – the gateway to the Mediterranean.
To the east lie the ports of the Middle East, including our Jebel Ali hub in Dubai, and those across Asia, including India’s vast port infrastructure and hubs across the Asia Pacific and China.
While to the south are African ports, set to play a growing role as south-south trade develops, and as the continent grows both exports and imports.
All will play to Somaliland’s strengths: stability with consistent commitment to growth, a young and ambitious population, and economic prospects, including significant minerals potential.
However, what’s most exciting for Berbera is its potential to serve not just Somaliland, but increasingly, Ethiopia – one of Africa’s fastest-growing and largest economies, with a population of 135 million people that vastly exceeds Somaliland’s six million.
Unlocking the landlocked
Ethiopia has no coastline and has been reliant on the Port of Djibouti, which handles around 90% of its trade.
This creates a significant opportunity for Berbera. Its overland route to Ethiopia is of similar length, and by offering an alternative with outstanding port efficiency, it can increase speed, resilience and capacity for Ethiopia and the Horn of Africa more broadly – especially as trade grows.
Our own findings indicate that Ethiopia will need access to multiple ports to support its rapid economic growth, with the Berbera Corridor being the obvious additional gateway.
We were therefore delighted in 2016 when the government awarded us a 30-year concession to operate and upgrade the port, with an automatic 10-year extension if performance conditions are met.
Within this agreement, we have committed to investing up to $442 million to develop the port and create a special economic zone covering 1,200 hectares, with room for further expansion, as well as tax and customs policies to support manufacturing and develop Berbera as a regional hub.
To support local communities, we have also invested in areas including education, healthcare and water infrastructure.
Working with partners
Unsurprisingly, we were not alone in seeing Berbera’s potential, and our role was just one of several concerted investments encouraged by Somaliland’s government.
The Abu Dhabi Fund for Development and UK Aid, the development agencies of the UAE and UK governments, announced grants for redeveloping the road from Ethiopia to Berbera. British International Investment (BII), the UK government’s development finance institution, invested alongside us in the port and special economic zone.
In addition, the United Nations Development Program (UNDP) also played a significant role in improving governance in Berbera and the region more broadly.
A port transformed
Today, the town feels very different from when we started work in 2017.
There is an optimism in the air and the bustle of trade, which always makes me smile. We have extended the total quay length from 650 meters to over a kilometer and installed cranes that can handle some of the largest vessels.
Annual capacity has risen fivefold to 500,000 containers a year, and while in 2017 it took four days to unload an 800-container ship, it now takes just 10 hours.
Berbera’s thriving economy
The economic benefits have been substantial. We employ around 1,300 permanent staff at Berbera, with 98% local employment, plus another 2,000 to 3,000 in non-permanent roles
There are people at Berbera who have become so skilled in their field that we send them to locations elsewhere to advise.
Broader benefits are showing in the local economy. The UNDP recently reported that by 2024, Berbera’s local government revenue had soared to $14m from $1.5m in 2012, allowing increased spending on schools, healthcare and other services.
Meanwhile, trade developments continue apace. Recently, we announced a new direct shipping route from Berbera to our Jebel Ali port in Dubai, one of the world’s largest and a major international hub. It joins direct services to Mundra Port in India, Jeddah and King Abdullah in Saudi Arabia, and Salalah in Oman.
Principles for frontier markets
Of course, investments on this scale require a range of factors to come together, as well as an understanding of local considerations. We know this from our work in Somaliland, as well as in other African countries.
But I often find it helpful to return to the guiding principles that form the ethos of our business – shaping how we approach strategy and how we invest and contribute to where we operate. Here are three:
But I often find it useful to have some guiding principles. They help us assess opportunities, and guide us as developments unfold. Here are three:
- Where others see problems, look for opportunities. It’s remarkable how widely held perceptions blind people to opportunity. Somaliland is a good example. It has a small population and very real poverty. However, it defies outdated stereotypes and is on a positive trajectory in terms of economic growth.
- Build ecosystems, not just ports. A port with a special economic zone and overland routes is far more valuable than a port alone – an approach we’ve used successfully in Dubai. Investing in broader infrastructure and using our network to drive trade can be especially effective in frontier markets. In Berbera, we worked with UAE companies to develop a cooking oil packaging plant in the special economic zone and an oil import terminal at the port. Berbera now exports oil to Ethiopia and Somalia, as well as serving the local market, while bulk oil imports have helped lower prices for consumers.
- If you build it, they will come. This phrase captures a mindset that underpinned our success in Dubai, and our subsequent growth elsewhere. When making pioneering infrastructure investments, we primarily assess the potential rather than immediate demand and are willing and able to take a genuinely longterm view. This approach enables us to align with national economic priorities, stimulate demand over time, and view short-term disruptions in context. It’s an approach that distinguishes us from other investors and has paid off repeatedly over time.
Primed for a bright future
I have written about Africa’s potential, both to increase exports, including manufactured goods, and to grow imports that contribute to economic development, strengthen trade, and reflect rising prosperity.
Across the continent, we’re investing for the long term – in ports, logistics, and partnerships that extend the benefits of trade. Berbera illustrates all these points, and as its momentum increases, the opportunities will only grow.
Sultan Ahmed Bin Sulayem is a prominent Dubai businessman, serving as Group Chairman and CEO of DP World and Chairman of the Ports, Customs & Free Zone Corporation. He has been instrumental in developing Dubai’s trade and logistics sector and transforming DP World from a local port operator into a global supply chain leader. Key achievements include the acquisition of P&O, developing the Jebel Ali Free Zone, and founding roles in projects like Nakheel and DMCC. He holds a degree in Economics and an honorary doctorate. He also chairs several other organizations and serves on important councils.
